Farmers ask for quick resolution of trade disputes


Issue Date: August 22, 2018
By Dennis Pollock and Ching Lee

With harvest underway for many of the state's specialty crops, California farmers say they could face potential losses of billions of dollars in export business as U.S. trade disputes with key foreign markets remain unresolved.

They voiced their concerns during two media events last week, organized by Farmers for Free Trade and the California Farm Bureau Federation. Held in Fresno and Bakersfield, the events allowed farmers and other agricultural leaders to discuss the importance of trade and the impact of export tariffs on California agriculture.

Don Cameron, general manager of Terranova Ranch in Fresno County, said uncertainty caused by ongoing trade disputes has driven almond prices down by as much as 15 to 20 cents a pound, as farmers begin harvest on what is forecast to be a record crop of 2.45 billion pounds.

Cameron, who serves as president of the California State Board of Food and Agriculture, pointed to the difficulty of lining up markets when it is unknown what tariffs will be as harvest unfolds. Though some almonds can be stored under tarps for a time, he said cold storage would be necessary to maintain quality.

"We've been told, 'This is going to hurt you. Be prepared. Your kids and grandkids will be happy with what you did,'" he said. "But our farms could be gone by that time."

California farmers first felt impacts of brewing trade conflicts in April, when China retaliated against new U.S. tariffs on steel and aluminum imports by levying their own import duties on American goods, including fruit, nuts and wine.

Those conflicts have escalated since then, with top trading partners including the European Union, Canada, Mexico, India and, most recently, Turkey imposing their own retaliatory tariffs on U.S. goods, said CFBF President Jamie Johansson, who attended the Bakersfield event. Some California agricultural products now face tariffs up to 50 to 60 percent, he noted.

"The real fear is that, as we are priced out of those markets because of the new tariffs, these countries will turn to other suppliers such as Australia or South Africa and begin to replace us," Johansson said.

Speaking in Fresno, CFBF Second Vice President Shaun Crook said California farmers risk losing markets that have been cultivated for years, though he added, "free trade has not always been fair trade." He noted Farm Bureau has "stood with the president" as he works to renegotiate trade deals and "to gain open and fair trade with our partners."

"But we need to be assured we can stay in business long enough to get those gains," Crook said. "We need to win on trade or we will end up losing farms in California."

A new study by the University of California estimates the trade disputes could cost U.S fruit and nut sectors $2.64 billion a year in lost sales to the export markets that have imposed higher tariffs, with the impact increasing to as much as $3.34 billion when factoring in reduced prices in alternative markets.

Almonds alone could lose about $1.58 billion in export revenue, the study found. The university also estimated the pistachio sector could face losses of $384 million; walnuts, $315 million; oranges, $133 million; table grapes, $86 million; and raisins, $26 million.

"Nobody wins trade wars. Everybody has leverage," said Rep. Jim Costa, D-Fresno, speaking at the Fresno event.

Brian Kuehl, executive director of Farmers for Free Trade, said the Trump administration is "playing with fire" by citing national security as the reason for imposing new tariffs on steel and aluminum imports. The concern, he said, is that other countries will do the same, with retaliations already underway.

Costa said he believes the U.S. would be better served to revive the 12-nation Trans-Pacific Partnership trade agreement, which he said could be used to put pressure on China to make trade reforms.

He said the administration's $12 billion aid package to help farmers soften the impact of tariffs isn't enough, adding that the money is "a drop in the bucket when you look at the size of American agriculture" and that "it will not take care of a surplus of almonds."

Johansson said there have been some "encouraging signs" that give farmers hope. He noted trade talks with Mexico are making progress and that a deal could be completed soon. In recent weeks, the European Union also has softened its stance, indicating it is open to buying more U.S. goods such as soybeans. In addition, U.S. and Chinese trade officials appear to be talking again.

"That's really what the American farmers want to see—that we are at least moving forward or making progress, that we are not at a stalemate," Johansson said.

He said farmers also would like to see the U.S. expand trade agreements with other countries, particularly with Japan, an important market for California agriculture.

(Dennis Pollock is a reporter in Fresno. He may be contacted at agcompollock@yahoo.com. Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.